Curves are converted into LineStrings when changing Coordinates using coordinates taken from Projected in "Geographic Coordinate System" Library.
Change the setting "Stroke Curves to Line Strings" to "Never" in "Edit Reprojection Settings" .Also the following link regarding the Reprojection Settings is quite useful:http://communities.bentley.com/products/microstation/w/microstation__wiki/reprojection-settings.aspx